EURO 2024 Copenhagen
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1657. Health Product Availability in the Presence of Cash Constraints: A Study of Community Health Entrepreneurs in Rural Kenya

Invited abstract in session TD-21: Complex societal problems, stream OR in Humanitarian Operations (HOpe).

Tuesday, 14:30-16:00
Room: 49 (building: 116)

Authors (first author is the speaker)

1. Lisanne van Rijn
Rotterdam School of Management
2. Harwin de Vries
Rotterdam School of Management
3. Lucas Veelenturf
Department of Technology & Operations Management, Rotterdam School of Management, Erasmus University

Abstract

Access to essential medicines and other health products remains a challenge in low- and middle-income countries, particularly in rural areas. Community health entrepreneurs (CHEs) play a key role in bridging this gap by selling health products in small rural stores. However, CHEs frequently experience stock-outs due to cash constraints, leading to lost sales. How to relieve cash constraints in rural areas is currently unclear. We address this question by conducting a field experiment that tests two interventions with 458 CHEs in Kenya in collaboration with social enterprise Healthy Entrepreneurs. The first intervention involved setting up stock-hubs. These are are small consignment stock locations where CHEs can replenish their inventory on-the-spot, thereby reducing the need for cash-on-hand. The second intervention is a cashflow game designed to help CHEs realize the value of retaining money in their business, thereby improving their cashflow resulting from increased sales. Although both interventions yielded positive effects on CHE sales, they were not statistically significant. The cost of accessing the hub and informational barriers limited CHEs’ ability to fully utilize the stock-hubs. The results of the cashflow game highlighted the need for additional measures beyond raising awareness to address cash constraints effectively. This study provides valuable new insights into addressing cash constraints in areas with high resupply costs and long resupply intervals.

Keywords

Status: accepted

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